The Good And The Bad In Your Numbers

Many people wonder what the credit score ranges are. They’ve heard that “good” credit can mean lower interest rates while “bad” credit can lock you out of various types of loans. But even if they know their actual score, they don’t know where they fall on the credit score ranges.

The reason for this confusion is, in part, that there is no clear definition for what the credit score ranges are.

Credit scores fall on a spectrum between 300 and 850. Each lender determines individually how they will price loans with everyone wanting to secure higher scoring individuals. But, this range can vary.

For instance, Freddie Mac, Smart Money, and PBS’s Frontline all agree that 770 is the cut off for “A+ Credit” while CBS reports that anything above 720 means that you don’t really have to work on your score because you’ll be lumped in with higher scoring individuals by lenders.

Bearing that in mind, here’s some general guidelines for credit score ranges.

· Scores above 760 qualify you for the best rates at most lenders. You will also qualify for the premium credit card deals.

· Scores between 720 and 760 will get you good rates at lenders. The difference between a 800 score and a 730 score will be about $30 a month on a $200,000 loan.

· Scores between 680 and 720 will still qualify you for prime rates. You should also have no trouble getting credit cards in this credit score range’s.

· Between 600 and 680, you will start to see an increase in interest rates. You should still qualify for credit card offers in general, but they won’t be the premium ones.

· Below 600 and you start having significantly higher interest rates.

· If you fall below 500, you may not qualify for unsecured loans at all.

Here’s a breakdown of what sample interest rates could be on a 30 year fixed rate mortgage as of right now and what a monthly payment on a $200,000 mortgage would be for those credit score ranges according to Bankrate:
· 780 – 5.8% - $1173
· 730 – 6.0% - $1199
· 680 – 6.4% - $1250
· 630 – 6.8% - $1304
· 590 – 9.8% - $1785 – Big Jump!
· Bankrate doesn’t calculate below 500

There is a difference between an top credit score and one at the bottom. This can result in a $545 a month extra payment. Over the life of a 30 year loan, that is close to $200,000 in extra interest paid.

There things you can do to raise your credit score. If you are thinking about buying a home in one year, make all of your bill payments on time. Your bill repayment history composes 30 percent of your credit score. Pay down all of your credit cards and other revolving credit. Make sure that toward the end of the year, you have no more than 50 percent of the total credit on any of the cards utilized. If you are going to close some credit card accounts, cancel the newer ones first. The length of your credit history on any one account matters.

Understanding credit score ranges can be important if you want to take out any kind of loan.